Hallam Land Management Ltd v Scottish Ministers [2007] ScotCS CSOH

OUTER HOUSE, COURT OF SESSION

[2007] CSOH 69

XA42/04

XA156/04

OPINION OF LORD BRAILSFORD

in the appeal of

HALLAM LAND MANAGEMENT LIMITED

Appellant;

against

THE SCOTTISH MINISTERS

Respondent:

________________

Appellant: J G Reid, Q.C.; Biggart Baillie

Respondents: R Crawford; R Henderson, Scottish Executive

19 April 2007

[1] This is an appeal under section 29 of the Land Compensation (Scotland) Act 1963 by Hallam Land Management Limited against a decision of the Scottish Ministers dated 22 October 2004. The appellant was aggrieved by the said decision of the Scottish Ministers relating to the terms of a Certificate of Appropriate Alternative Development ("CAAD") issued by East Dunbartonshire Council on 26 April 2002 in respect of an area of land extending to approximately 2.27 hectares located on the western side of the village of Torrance. The CAAD had been made following application by the appellant to East Dunbartonshire Council dated 27 February 2002. The application stated that residential development, either immediately or at a future time would be an appropriate use for the land if it were not proposed to be compulsorily acquired. The CAAD provided that:

".... the only acceptable use of the land would be amenity space for informal recreation and nature conservation interests and planning permission would not have been granted for any other development."

The reasons stated for this determination in the CAAD were:-

"In view of national, strategic and local plan policy, and the consistent approach of the planning authority (supported by the Scottish Office/Executive at appeal), it is clear that the continued use of the site as amenity space for informal reaction and nature conservation interests is the only appropriate use both immediately or at a future time."

It was the contention of the appellants that the said decision dated 22 October 2004 was not within the powers of the Ministers under the said Act of 1963 and that the appellant's interests had been substantially prejudiced by failure to comply with the requirements of the Act.

[2 ] The appellants contend that the said certificate should state that the site is in whole or in part suitable for residential development. The Scottish Ministers have decided in the said decision letter of October 2004 that no part of the site is suitable for residential development. It was submitted on behalf of the appellant that the Scottish Ministers and the reporter erred in law in a number of respects thus vitiating the decision.

[3 ] There was no material dispute between the parties as to the statutory background. The relevant statutory provision was the Land Compensation (Scotland) Act 1963 ("the 1963 Act"). Part IV of that Act is titled "Certification by Planning Authorities of Appropriate Alternative Development". Section 25 has the title "Certification of appropriate alternative development" and, as I understand it, provides a mechanism by which the development potential of land can be tested by either the owner of land to be compulsorily acquired or the planning authority. Sections 25-30 of the 1963 Act set out the procedure governing such applications and any subsequent appeals. For the purposes of this appeal the relevant parts of these provisions are as follows:

"25(1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, either of the parties directly concerned may, ...., apply to the authority for a certificate under this section.

(3) An application for a certificate under this section -

(a) shall state whether or not there are, in the applicant's opinion, any classes of development which, either immediately or at a future time, would be appropriate for the land in question if it were not proposed to be acquired by any authority possessing compulsory powers and, if so, shall specify the classes of development and the times at which they would be appropriate.

(4) Where an application is made to the planning authority for a certificate under this section in respect of an interest in land, the planning authority shall, ....., issue to the applicant a certificate stating that, in the opinion of the planning authority in respect of the land in question, either -

(a) planning permission would have been granted for development of one or more classes specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development; or

(b) planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development.

(7) In determining, for the purposes of the issue of a certificate under this section, whether planning permission for any particular class of development would have been granted in respect of any land, the planning authority shall not treat development of that class as development for which planning permission would have been refused by reason only that it would have involved development of the land in question .... otherwise than in accordance with the provisions of the development plan relating thereto."

I interject here to note that the certificates contemplated by subsection (4)(a) and (b) have been referred to as positive and negative certification respectively (by Lord Bridge of Harwich in Grampian Regional Council v Secretary of State for Scotland 1984 SC(HL) 1 at page 29) and that that description was adopted in argument in the current case. Section 26 provides that where a local planning authority have issued a certificate under section 25 in respect of an interest in land persons being entitled to that interest or any authority possessing compulsory purchase powers by whom that interest is proposed to be acquired may appeal to the Scottish Ministers against that certificate. Section 29 provides that any person aggrieved by a decision of the Scottish Ministers under section 26 may make an application to this court and that in terms of section 29(1)(b) the court

"if satisfied that the decision is not within the powers of this Act or that the interests of the applicant have been substantially prejudiced by a failure to comply with said requirements, may quash the decision."

It is the application of the principles set forth in those provisions, and in particular section 25, with which this appeal is concerned.

[4 ] For completeness I should mention certain other statutory provisions which were referred to in debate and which featured in counsel's argument. My attention was drawn to section 17 of the Land Compensation Act 1961, the English statutory enactment governing CAAD in that jurisdiction. Section 17(4) of the Act is the broad equivalent of sections 25(3) and (4) of the 1963 Act and is in the following terms.

"Where an application is made to the local planning authority for a certificate under this section in respect of an interest in land, the local planning authority shall, ...... issue to the applicant a certificate stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by an authority possessing compulsory purchase powers, that is to say -

(a) that planning permission would have been granted for development of one or more classes, specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development; or

(b) That planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development,

and for the purposes of this subsection development is development for which the land is to be acquired if the land is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for that development."

My attention was also drawn to certain provisions in Part III (sections 12-24) of the 1963 Act. That part of the Act sets forth provisions relating to the assessment of compensation. Section 12 sets out six rules which are, again as I understand the statutory intention, designed to assist a person determining a valuation of the land in question. In argument reference was made only to the first two rules (section 12(1) and (2)), that no allowance shall be made on account of the acquisition being compulsory and a definition for open market valuation. Beyond those general rules I was referred in Part III of the 1963 Act to sections 22(1) and 23(5) relating to assumptions as to planning permission relevant to determination of compensation.

[5 ] Mr Reid QC for the appellant indicated that his argument fell into four distinct parts; (1) an overall summary, (2) some background information and a history of the site, (3) submissions in relation to the decision letter of 22 October 2004 and (4) argument directed to the grounds of appeal.

[6 ] The broad summary given by Mr Reid was that the Scottish Ministers in reaching their decision had failed to disregard the underlying public purpose for which the land was acquired, namely public amenity and open space for informal recreation and nature conservation. He submitted that that purpose fell to be treated as having been cancelled at the relevant date, namely 22 March 2001, which was the date the Scottish Ministers confirmed the statutory purchase notice given under section 88 of the Town & Country Planning (Scotland) Act 1997 and was thereby deemed to be the date on which the acquiring authority were authorised to acquire compulsorily the appellant's interest in the site. I interject to record that there was no dispute between Mr Reid and Miss Crawford for the Scottish Ministers as to the relevant date. Mr Reid further submitted that the issue he had identified as constituting a failure, or error in law, by the Scottish Ministers depended upon the scope of the application of section 25(3) of the 1963 Act. He submitted that this provision required that it be assumed that the land in question was not being acquired for the public purpose for which it was in fact being acquired. He indicated that the interpretation and application of that subsection was at the heart of the dispute between his clients and the Scottish Ministers. Essentially what was at issue in this appeal was the breadth of the application of section 25(3) of the 1963 Act. This argument was primarily focused in grounds of appeal 1 and 2, although it was said to "filter through" to other grounds of appeal.

[7 ] In relation to the background and history of the site with which this appeal is concerned I was informed that in 1971 in an amendment to the County of Stirling Development Plan the site was zoned as open space on the Torrance Town Map. In 1973 the parent company of the present appellants purchased the site as part of a larger acquisition of land. That larger area was zoned for residential use with the present appeal site zoned for residential open space associated with the residential area. The appellant's parent company paid full residential value for the subjects. In 1988 the former District Council promoted a compulsory purchase order for the land in order to develop it as a local park. At this stage the appellants applied, on 7 September 1988, for a CAAD. A decision in relation to that application was made, after appeal, by the Secretary of State on 22 March 1990. The CAAD's being considered by the Secretary of State in that appeal related to two separate areas of land which included the land that constitutes the present appeal site. On the aforesaid date the Secretary of State cancelled the CAAD issued by the District Council and issued a certificate for either residential development or private leisure and recreation development. Following that decision, the compulsory purchase order was withdrawn and the CAAD could not therefore be used in a claim for compensation. In 1992 an application was submitted for the erection of 54 houses on a larger area of land that encompassed the present appeal site. That application was refused by the District Council primarily because the land concerned was designated in the development plan as "open space". The 1995 Strathclyde Structure Plan was approved by the Secretary of State for Scotland in 1997. Together with the East Dunbartonshire (Strathkelvin area) Local Plan which was adopted on 25 April 2000, this constitutes the policy background surrounding the present matter. The next relevant development in the history of the site was in 1997 when two separate applications were submitted for planning permission for residential development on areas between the site with which this appeal is concerned and an adjoining road. Both these applications were refused, the first in August 1999 the second in November 1999. The refusals were because the proposals were inconsistent with the local plan designation of the site as a Village Nature Park. Following these refusals, the appellants on 16 February 2000 served a Purchase Notice under section 88 of the Town and Country Planning (Scotland) Act 1997 on the relevant planning authority. That notice required the planning authority to purchase the site on the grounds that

"(a) the land has become incapable of reasonably beneficial use in its existing state, and (b) the land cannot be rendered capable of reasonably beneficial use by the carrying out of any other development for which planning permission has been granted or for which the planning authority or the Scottish Ministers have undertaken to grant planning permission."

On 8 May 2000 the council issued a response notice as required by section 90 of the said Act of 1997 intimating that it was not willing to comply with the purchase notice for the following reasons -

"(a) the land has been and continues to provide reasonably beneficial use in its existing state as amenity space for informal recreation;

(b) it is of nature conservation interest, constituting a valuable resource for the neighbouring residential areas and only requires limited maintenance expenditure;

(c) the use of the area for informal recreation has been endorsed by the local plan for the area adopted on 25 April 2000;

(d) the land could also be made capable of active agricultural/silvicultural use, in association with the owners adjoining agricultural holding."

The matter was then referred to the Scottish Ministers for determination. On July 2000 the Scottish Ministers refused to confirm the purchase notice but gave parties the opportunity to be heard on that notice. A hearing was held in that respect on 17 November 2000. This resulted in the issue of a report dated 24 January 2001, which report comprises number 6/2 of process. On 22 March 2001 the Secretary of State issued a decision letter confirming the Purchase Notice. As already noted the date of this decision letter is agreed to be the relevant date for present purposes. Following confirmation of the Purchase Notice the planning authority indicated that it was not prepared to adopt the 1990 CAAD decision as the basis for assessment of compensation and accordingly on 27 February 2002 the appellants submitted another application for a CAAD to the planning authority. The planning authority issued a further CAAD to the respondents on 26 April 2002 (number 7/9 of process) stating that

"the only acceptable use of the land would be amenity space for informal recreation and nature conservation interests and planning permission would not have been granted for any other development".

That was a class of development other than that specified in the appellant's second application of 27 February 2002. In May 2002 an appeal was taken against the grant of that certificate. On 8 April 2003 there was a hearing before a Reporter in respect of that appeal following which a report was issued on 14 August 2003 (number 6/4 of process). On 26 February 2004 the Scottish Ministers' first decision letter, number 6/5 of process, was issued confirming the CAAD issued by the authority. The present appellants appealed this decision letter to the Court of Session. The Scottish Ministers conceded that appeal on the basis that "they took into account matters which they ought not have taken into account, namely the provision of the village nature park" and for that reason exceeded their statutory powers. The decision was subsequently quashed in terms of a joint minute entered into between the appellants and the Scottish Ministers (number 7/4 of process) on 4 August 2004. The decision letter with which the current appeal is concerned was issued on 22 October 2004 (number 6/6 of process).

[8 ] Mr Reid submitted in relation to this letter, that the underlying assumption was that the proposal that gave rise to the CAAD application was cancelled at the relevant date. The "cancellation" that had to be taken account of in making a decision of this sort was of wide effect. He submitted that by application of principle to the facts it was reasonably plain that in this letter the Scottish Ministers had lapsed into error again. The cancellation assumption that had to be made involved in consideration of what would have happened, what planning permission would had been granted being put to one side. The application of principle necessitated putting to one side the public purpose for which the owner was being deprived of the land in question. Mr Reid's submission was that the decision letter failed in this respect. He said that the text of the letter of 22 October 2004 was almost identical to the earlier decision letter of 26 February 2004 which had, of consent, been quashed. There were only three changes between the earlier and later letters and in substance the letters were the same. He made particular criticisms of paragraphs 13, 18, 20, 21 and 26 of the letter. In essence the letter failed to assume that the public purpose in acquisition of the land had been cancelled.

[9 ] Against that general background Mr Reid then considered the grounds of appeal. In relation to the first ground he submitted that if, as he submitted, the law requires the underlying public purpose for which the site was acquired to be disregarded then the said decision letter of 22 October 2004 was flawed as it relied on that public purpose to support the issue of a negative or nil certificate. That underlying public purpose can be identified through consideration of a number of the planning documents. In this regard he made reference to the fact that in 1971 the site was zoned as open space. In the 1988 local authority compulsory purchase order the land was designated for use as a public park. On the 2000 adopted local plan it was referred to as open space and a nature park. It followed from this, it was contended, that the public purpose was clear and that such public purpose falls to be treated as cancelled. It was conceded that what is meant by the underlying public purpose may be open to dispute. Essentially what he said he meant by that was that the general principle of cancellation of the underlying public purpose for acquisition may not be in dispute but that the application of that principle in the particular circumstances of this case may be the crux of the dispute between the parties in this appeal. I should observe at this point that I interpreted this submission by Mr Reid as a concession that no issue of principle was at issue in the appeal, which essentially involved the application of accepted principle to the facts of the appeal.

[10 ] Mr Reid went on to submit that the land in question, on his submission, is to be treated as no longer valued by the community as open space for amenity or recreation land or land worth considering for ecological or environmental interests. All that was embraced and included in what he said was clearly the underlying public purpose, a purpose that was enhanced by the concept of a village nature park, a designation that had been applied to the land on a number of occasions in the Local Plan. It was to be noted that the term "village nature park" was not defined in any of the statutory plans. All of these purposes were, on Mr Reid's submission, cancelled.

[11 ] It followed from all that, submitted Mr Reid, that the question for the court was whether the reporter has treated that underlying purpose as cancelled. If that had not been done then the Scottish Ministers revised decision letter of 22 October 2004 was again vitiated by error in law and fell to be quashed.

[12 ] In support for this approach, Mr Reid referred to a number of authorities. The first was South LanarkshireCouncil v The Lord Advocate 2002 SC 88 and in particular the opinion of the court at page 92 paragraph 7 and page 93 paragraph 12 where the Court drew attention to guidance given to the interpretation of an earlier statutory version of section 25(4) of the 1963 Act by the House of Lords in Grampian Regional Council v Secretary of State for Scotland 1984 S.C.(H.L.) 1, and to Fletcher (Harlescott) Ltd v Secretary of State for the Environment [2002] 2 A.C.307 where the House of Lords considered section 17 of the Land Compensation Act 1961, the equivalent of section 25 in the 1963 Act.. I was then referred to Grampian Regional Council v Secretary of State for Scotland (supra) and in particular to the speech of Lord Bridge of Harwich at pages 29 and 30 and Fletcher Estates v The Secretary of State (supra) particularly the speech of Lord Hope at pages 316B, 319B, 322H and 324D. In addition to these authorities reference was made to Scunthorpe Borough Council v The Secretary of State 1997 JPL 653 and to Fox v The Secretary of State 1991 62 P & CR 459. These latter two cases, which were decisions at first instance, were presented to me as no more than illustrations of application of the general principle established in the House of Lords in Grampian Regional Council v Secretary of State (supra). It was submitted by Mr Reid that the cases after Grampian Regional Council (supra) demonstrate that the breadth of the disregard, or as he put it "cancellation", that required to be applied in appropriate circumstances made it impossible in the present case for the Scottish Ministers to rely on underlying planning policy as they do to justify, the granting of a CAAD for amenity open space, informal recreation and nature conservation interests.

[13 ] Mr Reid then turned to the second ground of appeal and submitted that as a necessary consequence of the cancellation of the underlying public policy reliance on the development plan was significantly diluted. It was, he said, readily to be seen that the Scottish Ministers have relied very heavily on a whole range of policies in the Development Plan in the decision letter. In this regard he referred to paragraphs 19, 20, 21, 22, 24 and 25 of the decision letter which all placed significant reliance on provisions of the Development Plan. In essence, the decision letter depended upon the Development Plan. This took Mr Reid back to the underlying public purpose point which he had already dealt with in his first ground of appeal.

[14 ] In relation to the third ground of appeal Mr Reid submitted under reference to paragraph 26 of the decision letter that the lack of housing need was an irrelevant consideration. He referred to Rowan-Robinson "Scottish Planning Law and Procedure" (2^nd Ed.) paragraph 8.106 as authority for a submission that lack of need for a particular development is not a reason to support a refusal of planning permission.

[15 ] In relation to the fourth ground of appeal Mr Reid submitted that there were difficulties in adapting the reporter's reasoning in relation to the northern part of the site when he was expressly dealing with the southern part of the site. In paragraph 44 of the decision letter the reporter concluded that the two parts of the site were distinct. The Scottish Ministers rejected the reporter's view about Greenfield sites yet they adopted the reporter's views on the southern part and applied the same reasoning to the northern part. This was submitted, as a matter of law, to be an error. Secondly, Mr Reid observed that there were only two differences between paragraph 26 of the decision letter under appeal and its equivalent, paragraph 20, in the decision letter of 26 February 2004 (number 6/5 of process) which was quashed. Those differences were the deletion of a functionally inconsequential phrase in the middle of the paragraph and the deletion of the words "through the provision of a Village Nature Park" at the end of the paragraph. Mr Reid submitted that the deletion of these words made no difference to the meaning of the paragraph. They were simply a formal omission and could not disguise a failure to cancel or disregard the underlying public purpose for acquisition.

[16 ] The appellants' fifth ground of appeal, as argued, was that the Scottish Ministers were bound as a matter of law to find the appeal site fell within the definition of "infill site" within the meaning of that term in the Strathclyde Structure Plan 1995. The definition of "infill site" in the structure plan is stated in paragraph 19 of the decision letter as "vacant or derelict land not in active or beneficial use within the urban area". Mr Reid submitted that the Scottish Ministers had failed to properly apply that definition in paragraphs 20 and 21 of the decision letter. In particular he submitted that the word "active" in the definition had a necessary connotation of something formal or organised. In the present instance there was no evidence of any such "active" use, the only evidence was of informal recreational use such as the walking of dogs (see Report of 8 April 2003, number 6/4 of process, paragraphs 6 and 41). He submitted that such activity did not fall within the definition of "active". He further contended that the phrase "beneficial use" in the definition fell to be given the same meaning as the words "reasonably beneficial use" in section 88 of the Town and Country Planning (Scotland) Act 1997. Under reference to Adams & Wade Ltd v Minister of Housing and Local Government 18 P & CR 60 that phrase must be construed as a reference to a use which was beneficial to the owners of the land. That was not, it was said, the case here. In relation to this ground it was further argued that the Scottish Ministers had utilised the need to find "active and beneficial use" as a means of introducing reliance of policy EP14 of the local plan by, Mr Reid put it, "the backdoor".

[17 ] The sixth ground of appeal was that the Scottish Ministers erred in law in concluding that the risk of flooding on the site was sufficient to justify a negative certificate there being no material before the Ministers which would enable them to reach that conclusion.

[18 ] A seventh ground was stated in the Grounds of Appeal, but it was conceded that the arguments set forth therein had been covered in the grounds already advanced.

[20 ] In addressing the questions which she had identified as being relevant to this appeal Miss Crawford first dealt with the factual background. She accepted that there was no dispute between her and Mr Reid in relation to the factual background as described by him and as previously noted. She did however wish to make a few supplementary points.

[21 ] Firstly, she drew my attention to the local plan which, as already noted, was adopted on 25 April 2000. In that plan policy LR5 allocated the site with which the appeal is concerned as "Village Nature Park". The phrase "Village Nature Park" featured elsewhere in the local plan. Notwithstanding that fact that phrase, as has already been noted, was not defined in the local plan. Secondly, Miss Crawford drew my attention to the fact that prior to the allocation of the site in the local plan, the area was zoned originally for open space and then from 1973 as open space associated with residential development of the larger area within which the appeal subjects were situated. Miss Crawford then drew my attention to the fact that the compulsory purchase order in 1988 was promoted to develop two areas of land. Firstly, 2.75 hectares and secondly, 1.03 hectares, as a local park. The 1988 Scheme proposed by the local authority under compulsory purchase powers was for the purpose of a local park. In the 1990 decision letter relating to the 1988 CAAD the Scottish Ministers correctly decided at paragraph 17 (Production 6/1) that that Scheme had to be disregarded. As already noted that Scheme was not carried through to a conclusion. Miss Crawford then drew my attention to the fact that in the CAAD of 26 April 2002 it was said that the only acceptable use of the site was as amenity space. In that Certificate itself there is a finding of a use and there has been correct disregard of the finding in relation to the purchase notice that the land is not capable of reasonably beneficial use. It followed from all that that since 1990 at least the site has not been considered appropriate for residential development. It is that fact which resulted in the service of the purchase notice. That is why the appellant's argue the land is not capable of reasonably beneficial use and which led to the purchase notice being confirmed and the land being sterilised.

[22 ] Miss Crawford then identified as the third part of her submission the question of construction of section 25 of the 1963 Act. She submitted that in terms of that Act it was appropriate to disregard the purpose or scheme for which the land in question was acquired, together with any policies underlying that scheme. She went on however to submit that you do not disregard other schemes if relevant, or other policies which relate to land in general or any planning need which might achieve those policies. The question which therefore requires to be asked is, if the site is not to be acquired because it is no longer capable of reasonably beneficial use, or for use relating to any other policy in the development plan relating to the site, would the site be appropriate for residential development?

[23 ] Miss Crawford was in agreement with Mr Reid in relation to the authorities which are relevant for determination of this appeal. In relation to South Lanarkshire Council (supra) she drew my attention to passages in the Opinion of the Court at pages 92A-D, 93C-E and 95H-I. In relation to Grampian Regional Council (Supra) Miss Crawford submitted that this case was authority for the proposition that the purpose of a CAAD is to ensure that a landowner receives compensation based on development value of land unaffected by any depreciation attributable to the acquisition. Applying that principle to the present case it is therefore appropriate to leave out of account consideration of the acquisition scheme and any underlying policy relating to that Scheme. In support of that view she firstly drew my attention to passages in the Opinion of Lord Dunpark in the Inner House at pages 9, 12, 13 and 14 which were approved in the House of Lords. She then drew my attention to passages in the speech of Lord Bridge in the House of Lords at pages 29, 30 and 31. In relation to the Scunthorpe Borough Council (supra) case she observed that the report available was merely a note. As such the provenance of the report was unclear. Moreover, whatever the reports status, it was a single judge decision at first instance. Further it was not clear if the case related to a compulsory purchase order or purchase notice situation. Because of these difficulties Miss Crawford submitted that little of value could be taken from this case. So far as the cases of Fox (supra) and Bell (supra) were concerned these were also first instance cases and were no more than illustrations of principles developed primarily in Grampian Regional Council (supra) being applied. I should observe that, so far as I could determine, there was little, if anything, to distinguish the approach taken by Mr Reid and Miss Crawford to the authorities.

[24 ] Miss Crawford then concluded her submissions with a detailed analysis of the report which was the subject of the appeal and consideration of the appellant's grounds of appeal.

[25 ] The question for me, as formulated by Mr Reid and, as I understood it, largely accepted by Miss Crawford, was what matters required to be considered by the relevant authority when considering the CAAD. Put another way what matters required, as a matter of law, to be disregarded in determining whether the CAAD was to be upheld. I consider that the approach I must take to answering that question has been considered and determined in a way that is binding upon me in Grampian Regional Council v Secretary of State for Scotland (supra), Fletcher Estates v Secretary of State (supra) and South Lanarkshire v Lord Advocate.

[26 ] In Grampian Regional Council v Secretary of State for Scotland (supra) the House of Lords considered the correct approach to interpretation and application of section 25. Lord Bridge explained the nature and purpose of CAAD as follows (at page 29):

"A decision by a planning authority or by the Secretary of State on appeal, whether a positive or a negative certificate is appropriate, must proceed on the hypothesis predicated by subsection (3) and determine what planning permission, if any, would have been granted if the land were not proposed to be acquired by any authority possessing compulsory purchase powers. The sole purpose of the certification procedure is to provide a basis for determining the development value, if any, to be taken into account in assessing the compensation payable on compulsory acquisition. If a positive certificate is issued, it is to be assumed that the certified permission would be granted, subject to such conditions and at such future time, if any, as may be specified in the certificate: Section 23(5). If a negative certificate is issued, 'regard is to be had' to the negative opinion certified: section 22(3). Although this is not conclusive, it is difficult to envisage a situation in practice in which the Lands Tribunal, when assessing compensation, could be persuaded to act on a contrary opinion to that certified by the planning authority or the Secretary of State on appeal."

Lord Bridge subsequently (at page 30) observes that the essential purpose of obtaining CAAD is as

".... part of the overall scheme of the Act to secure the payment of fair compensation to landowners who are compulsorily expropriated, or, expressed more specifically, to ensure that, when urban land, otherwise available for some form of urban development, is acquired for a necessary public purpose, the compensation will reflect its urban development value."

The approach enunciated by Lord Bridge was considered by the House of Lords in the subsequent English case, Fletcher Estates v Secretary of State (supra), where further guidance was given on the approach a planning authority must take in considering an application for a CAAD under section 17 of the Land Compensation Act 1961. As already noted that provision is the equivalent of the Scottish provision in section 25 of the 1963 Act and is in effectively the same terms as its Scottish counterpart. The approach of the House was expressed in the speech of Lord Hope, with which the other members of the Judicial Committee concurred, and was to approach the issue as one of the construction and meaning of section 17(4) of the Act of 1961, that the local planning authority must issue its opinion regarding the grant of planning permission in respect of the land in question as "if it were not proposed to be acquired by an authority possessing compulsory purchase powers" (at page 319B). In explaining how that should be done Lord Hope stated (at page 322H-323A)

"The position appears therefore to be quite straightforward upon a consideration of the ordinary meaning of the words used in the statute. The assumption which the local planning authority must make relates to the situation at the relevant date. The scheme for which the land is proposed to be acquired, together with the underlying proposal which may appear in any of the planning documents, must be assumed on that date to have been cancelled. No assumption has to be made as to what may or may not have happened in the past."

The approach formulated by the House of Lords in these two cases was considered, and approved, by the First Division in the recent case of South Lanarkshire Council v Lord Advocate (supra) - see the opinion of the court at pages 92-93. I consider that the issues raised in the present appeal are directly in point with the issues determined by the courts in the series of cases I have referred to and I am accordingly bound, in deciding the present case, to apply the principles enunciated by Lord Bridge and Lord Hope and quoted above.

[27 ] The question therefore becomes whether the planning authority, and the Scottish Ministers in upholding the authorities' decision, have in reaching their decision determined what planning permission would have been granted on the assumption that the scheme for which the land is proposed to be acquired, together with any underlying proposal which may appear in any of the planning documents, is assumed to have been cancelled on the relevant date. As I understand his argument this was the principle Mr Reid relied upon in formulating his submission that the cancellation to be encompassed by the decision maker was of wide effect and involved putting aside the public purpose, that of and the creation of a local nature park, for which reason the appellants were being deprived of the land.

[28 ] In answering that question I take into account the underlying purpose of a CAAD. This is an attempt by the person seeking the CAAD to show that in the absence of the proposal of the acquiring authority the value of the land in question would have been increased by the likelihood of the grant of some often planning permission. As expressed by Roch J in Fox v Secretary of State the purpose of the statutory scheme whereby CAAD's operate is to

"achieve the result that where a public authority acquires land using compulsory purchase powers for a purpose which will benefit the public generally, or a section of the public, an unfair proportion of the cost of achieving that public purpose is not put upon the owners of the land being acquired. Thus if, but for that public purpose, it would have been appropriate for the land to be developed in an alternative way, the price payable for the land is to be the price payable for the land with that development potential."

When that purpose is appreciated it becomes clear that in order to achieve the statutory intention there must be disregarded the scheme for which acquisition is effected and any related planning considerations.

[29 ] When the issue is approached from that standpoint the question narrows to what is intended to be encompassed within the term "related planning considerations". Mr Reid says that this is to be construed very widely, in a way which would result in virtually all planning consideration being disregarded. Miss Crawford approached the matter more narrowly. On her approach to construction you do not require to disregard other policies within the development plan which may relate to the land, nor do you ignore any general or planning need which might achieve those policies.

[30 ] I cannot accept Mr Reid's very wide approach. In my view it is ultimately both unrealistic and likely to lead to unfair results. There is no doubt, as has been authoritively determined in the cases referred to, that in order to ensure fair value to the owner who is being deprived of a valuable right for the public benefit, it is necessary to disregard the scheme for which acquisition is effected. I do not however consider that such disregard must encompass any other possible development simply because it may at some stage have been encompassed within the development plan and may, however remotely or tangentially, relate to the land in question. In my view such an approach could potentially result in only the use desired by the owner being viable. This would not be consistent with the purpose of achieving a fair compensatory value for the owner. It would in fact provide a result which could become an objective for an owner of land. I do not consider this would be "fair" in the sense that it would provide such an owner with a value for his land which he could have achieved by no other route.

[31 ] For these reasons I do not consider that the Scottish Ministers erred in having regard to their consideration and application of planning policies in the way they did in their decision letter. Whilst I accept, as Mr Reid submitted, that there are few differences between the decision letter now challenged and the earlier version which was of consent quashed I do not consider that this necessarily entails that there is no difference in substance between the letters. In my view the decision letter of 22 October 2004 was the result of a proper reconsideration of the substantive issues raised in the appeal. For completeness I should also state that I do not consider that there was any error on their part in having regard to evidence relating to housing need or potential flooding risk in their overall assessment of the appeal before them. I consider these were relevant policy considerations to which they were entitled to have regard.

[32 ] For all the foregoing reasons I refuse this appeal.

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Hallam Land Management Ltd v Scottish Ministers [2007] ScotCS CSOH_69 (19 April 2007) URL: http://www.bailii.org/scot/cases/ScotCS/2007/CSOH_69.html Cite as: 2007 GWD 16-295, [2007] CSOH 69, [2007] ScotCS CSOH_69

Scottish Court of Session Decisions